Closure plans ‘on track’ as SCA reveals 53% profit hike

The Swedish paper and packaging company reported a 53% increase in profit before tax, excluding restructuring costs, to SEK2.2bn for the three months ending 30 September 2009. Sales for the period fell 1% to SEK27bn.

News of the improved profits will be seen as good news by SCA shareholders, who were told in April to expect a loss for the year as plans for 11 plant closures were revealed.

“Nine of the 11 planned packaging plant closures have been carried out and half of the planned 2,200 positions have been cut,” said SCA president and chief executive Jan Johansson.

“We are thereby on track with the plan we presented in conjunction with the first quarter report, and as a result, earnings for packaging improved between the second and third quarters,” he said.

Johannson added that the recovery in liner prices in September and October was not expected to filter through to corrugated board prices “until the end of the first quarter of 2010″.

The cost-saving plan is expected to generate SEK1bn in annual savings.

In August, SCA parted company with its European packaging head Phil Almond, temporarily replacing him with chief financial officer David Stead.

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